Whereas the focus of Alberto Fernández's campaign is set upon criticizing Macri's economic guidelines, the precandidate of the Frente de Todos party continues to make no concrete proposals and refuses to designate an official spokesperson to give definitions of how the economy will grow, should he get elected President of Argentina.
In fact, his main referents are quite dissimilar, if not opposed; and, as LPO has learned, this seems to be the nature of its organizational chart of economic policy: a two-way line with the liberal wing that Guillermo Nielsen embodies in the ministry of Treasury and a rather heterodox line for Production as a means of energizing the economy and curbing the closure of SMEs.
Behind closed doors, the agreement between Cristina Kirchner and Fernández included the displacement of La Cámpora and the heterodoxy of three key ministries in which several allies of the presidential candidate would be positioned: Finance, Foreign Ministry and Homeland. Thus, there'd be a way to reach a synthesis between economic policies while avoiding a double wheel that would generate inconsistencies among these: this would preclude transferring to the provinces, the decisions of spending and paying debt which could become more conservative; and, if a renegotiation with private capitals is reached, the interlocutor would be a person closer to the free market.
On the opposite side, Production would look for a greater state presence, including more intervention in the style of Keynes. This could suit Matías Kulfas, an economist greatly trusted by Alberto and openly critical of the industrial policy of Cristina Kirchner; or perhaps Axel Kicillof, as sources assured LPO, regarding the former minister.
In this sense, a source close to the former president pointed directly to Emmanuel Álvarez Agis: "he's got the confidence vote of both Cristina and Alberto", although they clarify that there is still a need to talk about the issue of names for each ministry.
Agis, up to this point, leads over Kulfas because he has the confidence of the two members of the electoral formula. Although Kulfas has in his team in the Callao group economists who have been working on industry issues for years, such as Fernando Peirano , whose name isn't well-regarded amid the markets after being Mercedes Marcó del Pont's yes-man for several years.
In any case, there is a risk of a schizoid policy where one team proposes loans at lower rates for industrial development and the other postulates the need for high-interest rates to create a local market. Amid this tension, the Central Bank would remain not only to determine monetary policy in terms of interest rates but also in terms of the price of the dollar and spurious competitiveness of the economy.
For the time being, Guido Sandleris - despite having been a Kicillof partner in his years of university policy- doesn't have either endorsement by the Senate or the sympathy of Alberto Fernández and, therefore, his future departure from the Central Bank is a given amid the heterodox.
Thus, the monetary policy of the Front of All becomes a big question mark; while ensuring his "no blocking" policy, the presidential candidate has already pointed out that measures must be taken to curb the flight of currencies and limit the entry of fly-away capital.
Argentina has already closely experienced the Balkanization of the Ministry of Economy which Macri implemented and which generated a macroeconomic inconsistency between the Finance, Finance, Energy and Central Bank policies which already existed, a situation that ended in a currency crisis and which hindered the coordinated response of the economic team.
In this sense, a source aware of the proposed coexistence between liberals and heterodox, revealed to LPO that it is actually a necessary condition: "La Cámpora should go to La Plata with Kicillof" so that Guillermo Nielsen occupies Treasury and deals with the difficult balance between fiscal deficit and the cost and type of financing.
Therefore, the rest of the portfolios would be as heterodox as they could, however, Nielsen would retain enough power to step on any issues on the other ministries if necessary and force them to be more austere. This could show external creditors that there is a willingness to pay, but a factual impossibility of complying with the schedule of the IMF and, perhaps, with private ones.
In this scheme, the "hardest part" at the forefront would be the making of political decisions and negotiations with the IMF; so the heterodox wing, in a more interventionist manner, would be in charge of the operational part.
The only consensus so far among the economic referents of Alberto Fernández is that on the side of the adjustment of public spending they will accelerate all the problems: the Argentine economy will remain stagnant, tax-collection will fall, moving away from a fiscal balance that would generate more pressure on the dollar; and on top of it all, inflation and unemployment will worsen.
Álvarez Agis has already stated that a new agreement with the IMF should resemble the first Stand-By, allowing the economy to restart and managing to postpone the schedule of overdue payments for about three more years.
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